Record fine for gas company Cadent over supply failures

  • Video report by ITV News' Consumer Editor Chris Choi

Gas network company Cadent has been hit with a record breaking fine of £44m after thousands of customers were left without gas for months.

Energy regulator Ofgem said Cadent had admitted three "serious" customer failings, and the regulator’s investigation was closed.

The gas company must pay a total of £24 million and set up a £20 million community fund - the largest-ever enforcement action of its kind.

The company had lost records for pipes in 775 high-rise in its gas network, including a block of flats in Battersea, south-west London.

One frustrated resident told ITV News: "Put that into perspective, look at Grenfell, look at what's happened there.

"You don't know where the pipes are. Between the council and the company, you don't know where the pipes are, it's abysmal."

Another said: "[Not knowing where the gas pipes are] worries me, because I assume the people carrying out the works would know what to do. I mean that is very dangerous."

Thousands of residents in blocks of flats served by Cadent were left without gas for longer than they could have been, while others did not receive the required compensation, the regulator said.

Ofgem said Cadent had committed to an improvement plan after the regulator’s intervention and would also set up a £20 million fund to support vulnerable consumers.

The company, who supplies gas to 11 million premises across the UK, will also double the statutory compensation payments, at an estimated cost of £6.7 million, for customers who unexpectedly lose their gas supply for longer than 24 hours over the next two years.

Ofgem said it became aware in 2018 that Cadent was increasingly leaving residents in blocks of flats without gas for longer than necessary, for example during pipe repairs.

Earlier this year, Cadent told the watchdog that it failed to pay the required compensation over six years to a possible 12,000 residents left without gas for more than 24 hours, and also reported that it had no records of gas pipes in many high-rise blocks of flats in its London network.

Ofgem said Cadent had admitted all three failings, and the regulator’s investigation was now closed.

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Ofgem chief executive Dermot Nolan said: “Cadent has a duty of care and responsibility to millions of people across half of the country who rely on the gas it pipes to their homes for cooking and heating.

“Cadent acknowledges that it failed these customers by leaving many without gas for longer than necessary, failing to properly compensate some of those affected and not having the proper systems in place to keep records of all the high-rise blocks of flats it supplies.

“Ofgem has worked with the company, which is under new ownership and has given commitment to improve its operations to put customers at the heart of the business, to help it address its failings and prevent further harm to customers’ interests.

“Cadent has also agreed to make a significant financial contribution to customers as redress in recognition of its past failings. This is a move we welcome.”

Cadent chief executive Steve Hurrell apologised, saying the company had “fallen short of customer expectations and the higher standards we have now set ourselves”.

He said: “While Cadent is a relatively new business, some of its record-keeping processes and practices go back many decades, and a number of the issues we are addressing today are a legacy of that past.

“We are taking the opportunity to reshape the company to set new standards of customer experience and are investing significantly through our community fund to reach those customers in the most vulnerable situations.”